ERC223 Explained: 5 Things You Should Know About It

Simply put, ERC223 is an improved version of ERC20 – here’s what’s new…

ERC20 is by far the single most popular standard for launching new tokens; it is used by pretty much all new projects that we are being unveiled on an almost daily basis.

We have discussed ERC20 before, and if you haven’t read that article – do it now. For starters, you should know that ERC stands for “Ethereum Request For Comments” while 20 or 223 represents a version of the standard. Also, because it “lives” on Ethereum’s blockchain, moving ERC223 tokens (or ERC20 tokens, for that matter) from one account/wallet to the other requires ether as Gas.

Simply put, ERC223 is an improved version of ERC20, and here we’re highlighting 5 things you should know about the new standard for issuing tokens on the Ethereum network. Let’s get started…

1. ERC 223 eliminates the problem of lost tokens

This problem can occur during the transfer of ERC20 tokens to a contract, when people mistakenly use the instructions for sending tokens to a wallet. Subsequently, ERC223 allows users to send their tokens to either wallet or contract with the same function transfer, thereby eliminating the potential for confusion and lost tokens.

You would think this isn’t a huge problem, but you would be wrong. According to Etherscan, there are literally millions of lost money in ERC20 tokens such as QTUM, EOS, GNT, STORJ, Tronix, DGD, and OMG.

So to prevent this, ERC223 will make token transfer mechanism similar to “regular” Ether transfer.

2. ERC223 allows developers to handle incoming token transactions

…and reject non-supported tokens. In this case, developers won’t lose the tokens as they will be refunded back to them, minus the Gas. Needless to say, this is not possible with ERC20.

3. Energy savings

Whereas transfering of ERC20 tokens requires two steps, the same process takes only one step with ERC223 tokens making for a twice as effective “endeavor” — you’ll need two times less Gas and as a result blockchain wouldn’t get bloated that easily.

In other words, ERC223 makes token transactions cheaper.

4. Backward compatibility

ERC223 tokens are backward compatible with ERC20 tokens. This means that ERC223 supports every ERC20 functionality, and contracts and/or services working with ERC20 tokens will also work with ERC223 tokens.

5. Adoption will take time

ERC223 is still a new standard and despite its clear advantages, it will take some time before it gets adopted by project developers. Simply put, the infrastructure surrounding the new standard is still being developed, with most exchanges NOT listing ERC223-based tokens. And the same goes for popular cryptocurrency wallets – for the time being, most of them lack support for the new standard.

Nonetheless, it is safe to assume it is just a matter of time before ERC223 emerges as a dominant standard for blockchain projects…

DISCLAIMER: Opinions expressed here are author's alone, not those of any partner bank, credit card issuer, hotel, airline, or other partner. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

Find us on Facebook

The most interesting stories are here!Get them today - every week in your inbox, forFREE!

Disclaimer

Any opinions, analysis, reviews or recommendations expressed in on this site are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by a third party.

Awesome! We have more content to help you make more money. And save it for the rainy days. Tell us where to send you the good stuff. It's FREE, of course.

Wallet Weekly is part of an affiliate sales network and receives compensation for sending traffic to partner sites. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). Wallet Weekly does not include all financial companies or all available financial offers.